BHP Billiton
’s new chief executive, Scottish-born non-ferrous division head Andrew Mackenzie, has said he will look to unlock synergies between the company’s mining and petroleum units after he succeeds Marius Kloppers on May 10.

Mr Mackenzie told media in Sydney on Wednesday that BHP was the only resources company in the world that could leverage off its exposure to both sectors.

“I believe there are some quite powerful synergies that you can unlock between mining and petroleum. I think petroleum has a fundamental part to play within our company and that we are possibly the only company that can create value by unlocking these synergies," he said.

“Clearly from my background we have done a lot but we are well placed to do more.

“I believe Marius has left the company in a much stronger position than when he found it. I am keen to build on that momentum.

“I will extend our pressure on costs and drive us to the bottom of cost per mined tonne."

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New leader doesn’t mean new strategy: Nasser

BHP chairman Jac Nasser, however, sounded a note of caution on any immediate changes to the company’s operations and said it was incorrect to assume the incoming chief executive, who spent 22 years with oil major BP, would mould a new strategy based on his corporate background.

“We’ve chosen a new leader but that doesn’t mean we’ve chosen a new strategy," Mr Nasser said on Wednesday.

“He has spent 30 years in the overall resources sector in upstream and downstream and has that rare blend of mining and oil and gas experience. But I would not interpret his background as a strategy change."

Andrew Mackenzie, right, will replace Marius Kloppers, right (pictured with BHP chairman Jac Nasser) as CEO on May 10.
AFR

The result is the second consecutive fall in half-year profits as a result of lower commodities prices.

BHP also took $US3 billion of impairments alongside its results, of which $US865 million was on its Australian nickel business, $US1.53 billion on its new Worsley alumina refinery in Western Australia and $US655 million arising from a capital projects review. Including some gains from asset sales. It reported $US1.4 billion of exceptional items.

During his reign, BHP made a failed hostile bid of $US147 billion for Rio Tinto while its proposed iron ore joint venture with Rio also collapsed.

In August 2012, Mr Kloppers declined his annual bonus after unveiling $US3.3 billion of asset write-downs – the bulk of them on the ill-timed purchase of US shale gas fields.

Mr Mackenzie was one of four internal candidates in line for the top job at the world’s largest miner.

Other contenders included ferrous and coal head Marcus Randolph, aluminium and nickel boss Alberto Calderon and petroleum boss Mike Yeager.

Mr Kloppers’ retirement follows the surprise axing of Rio Tinto chief Tom Albanese in January following $US14 billion of write-downs, the bulk on its ailing aluminium division. The Anglo-Australian mining giant has appointed iron ore division head Sam Walsh as its new boss.

Mr Kloppers on Wednesday said the decision to retire was difficult.

“I’ve been very fortunate to lead one of the world’s great resource companies. Deciding the right time to retire was never going to be easy," he said in a statement.

“However after almost 20 years with BHP Billiton, 12 as a senior executive and nearly six as CEO, I believe now is the right time to pass the leadership baton."

Marius Kloppers announces his retirement and the appointment of Andrew Mackenzie in a video message to staff.

Mr Mackenzie said it was a privilege to be asked to lead BHP.

“This appointment humbles me deeply," he told a press conference.

“I am also in his [Mr Kloppers’] debt because since my arrival he has prepared me incredibly well.

“There are lots of things that are great about this company that I have no intention of changing. I am going to continue this momentum … for an even sharper focus on the execution of that strategy."

Kloppers leaves BHP stronger: Nasser

Mr Nasser said Mr Kloppers had made an “outstanding contribution" to BHP’s growth.

“Under Marius’ leadership we have seen BHP Billiton grow to one of the most valuable companies in the world. Marius leaves BHP Billiton a stronger, safer and better company. There can be no better report card than that," he said at a press conference.

“It is never easy when an outstanding and successful CEO decides to move on. From a board perspective we want to ensure this does not occur at a bad time … a good succession process involves attracting the best global talent over a sustained period and we are fortunate that foundation has been laid inside this company for a decade. It also means benchmarking against outside alternatives."

Mr Nasser said Mr Mackenzie brought a unique combination of skills and experience to the CEO role.

“He has worked for three blue chip companies over 30 years. He is a rare executive as he has experience in oil and gas, petrochemicals and minerals areas of this business. That fits us perfectly.

“He is a global leading executive."

Capex forecasts unchanged

BHP had previously indicated plans to spend $US22 billion on sustaining capital and growth projects this year, including $US4 billion on its US shale assets, where it is focusing on boosting production of higher-value liquids. Those forecasts have remained unchanged.

However, it had ruled out approving big new growth projects this financial year as a result of the high spending that had been committed when commodities prices were higher.

BHP has targeted 10 per cent annual volume growth in copper equivalent terms to the end of fiscal 2014.

BHP said it had reduced controllable cash costs by $US1.8 billion on an annualised basis.

On a divisional basis, earnings from petroleum and iron ore were higher than analyst forecasts, but base metals, metallurgical coal and diamonds were lower.